WASHINGTON — A FINRA hearing panel has fined Syosset, N.Y.-based David Lerner Associates Inc. $2.3 million and suspended head trader William Mason for six months with a $200,000 fine for charging excessive markups on municipal bond and collateralized mortgage obligation transactions over a two-year period.

The panel also ordered the firm to pay more than $1.4 million, plus interest, in restitution to affected customers, according to a FINRA release issued Wednesday.

Between 2005 and 2007, David Lerner and Mason charged excessive markups on more than 1,500 muni-bond transactions and 1,700 collateralized mortage obligations transactions, the hearing panel found.

The markups caused retail customers to pay unfairly high prices and receive lower yields, FINRA said.

Jonathan Hemmerdinger writes for The Bond Buyer.